GMH back to making net payroll only

Kandit has uncovered financial problems Guam Memorial Hospital attempted to conceal from the public by confirming with the Government of Guam Retirement Fund that GMH failed to remit its contributions within the legal deadline recently. In fact, as of the publication of this story, the money GMH owes GGRF since April 8, for its employees’s contributions to their pensions has not been paid.

These findings are despite a claim GMH public information officer Cindy Hanson made to Kandit last week that GMH has made good on its payroll obligations.

“In response to your questions regarding GMHA payroll, we are current in payroll to our employees,” Ms. Hanson told Kandit by email on Monday, April 24.

GMH employees and other sources of information last month began providing information to Kandit that GMH was not remitting gross payroll to employees, only net payroll. Net payroll is what an employee would be paid every two weeks that he or she could deposit or cash. Gross payroll includes the paychecks plus payments GMH makes to other companies and government agencies on behalf of the employees. For example: The GMH and employee share of an employee’s health insurance premium, payroll taxes to Guam Department of Revenue and Taxation, contributions to employee retirement accounts, and payroll deductions for mortgages, car payments, and other loans.

It is illegal for government agencies to make net payroll only.

But, according to GGRF sources, that’s exactly what GMH did only a few weeks ago, and again in April. Hospital management eventually made the payment for its first recent failure to remit retirement contributions. GGRF expects to receive payment today from GMH for the April 8 payroll.

A financial review in 2019 revealed GMH had failed to remit gross payroll. GMH administrator Lillian Perez Posadas fired then-GMH chief financial officer Benita Manglona. Kandit has asked Ms. Hanson whether Ms. Posadas is considering firing the current CFO for the latest breaking of the net payroll law.

The net payroll issue reported here only accounts for failed timely payments to the retirement fund. It is unknown whether GMH has been delinquent in other payments and deduction, such as insurance, taxes, and payroll deductions to banks. The only indication of other payments not being made are employees asserting GMH has failed to make deducted payments on their bank loans, causing late fees, penalties, and negative credit impact.

And the reason this information is unknown is because GMH has never disclosed these problems to the public, and GMH officials refuse to provide Kandit direct answers to its questions about the latest net payroll scandal.

GMH and Adelup refused to answer question for two weeks, and after several follow up attempts

Kandit began asking GMH and Adelup about the net payroll accusations 13 days ago, on April 18. We followed up several times, having received vague answers, or answers that evaded the questions.

On April 18, we asked Ms. Hanson, Ms. Posadas, GMH legal counsel Jeremiah Luther, and governor’s director of communications Krystal Paco-San Agustin: “[M]ay I have confirmation that GMH is behind on making gross payroll for any or all of its employees? If you may confirm this, is GMH behind on gross payroll for all, or just some employees? How many, if just some? How long has this been happening? Why is this happening? As of the most previous payroll, what is the payable amount?”

Ms. Hanson replied the same day, in part: “I will refer your inquiries for payroll to our CFO, however, we all got paid on the last GovGuam payday. I will let give you an official response.”

Kandit replied that day: “Just a clarification regarding my request, though. My understanding is that GMH has been making net payroll, which means employees would see their regular paychecks, including whatever differential pay an employee may be entitled to. What I understand from sources is that GMH has not made gross payroll for a bit, which would include payments GMH is supposed to make for employees, including the employee share of retirement, health insurance premium, etc.”

The following day, on April 19, Ms. Hanson responded: “Got it! I will update the inquiry to the CFO. Thanks, Troy!”

Five days later, and after no answers from GMH, Kandit followed up with both Ms. Paco-San Agustin at Adelup and with GMH.

Ms. Hanson responded: “Krystal Paco contacted me with the question you sent to them re: GMHA payroll. I have shared with her that we are currently working on the same inquiry for you. I wanted to assure you that GMHA is treating your questions like a FOIA request, which is what I thought you wanted, per your text. I may have misunderstood and perhaps you were only requesting to that the HDR questions be treated as a FOIA. Could kindly confirm if it was both sets of questions or only the ones regarding HDR that you wanted to be treated like a FOIA request? My apologies if I misunderstood.”

Kandit replied: “Hi Cindy. If GMH will like to send me documents showing proof of gross payroll being made with integrity, then sure, I’ll take those. But what I really want regarding that particular inquiry is confirmation or denial that GMH has been or has recently not made full (gross) payroll. Thank you so much, and I apologize for any confusion.”

Ms. Hanson replied the same day: “Just confirming some info and should get back to you shortly.”

She then added: “Just confirming some info and should get back to you shortly … I will have responses coming to you in the morning, at the latest. I have the info but need approval to send it out and the approving party is in a meeting with visiting guests and I am not sure she will be out before 5 p.m.”

Then, the comment from Ms. Hanson that conflicts with the information from the retirement fund: “In response to your questions regarding GMHA payroll, we are current in payroll to our employees.”

Unsatisfied with the answer, Kandit replied that evening: “Thank you, Cindy. But my question wasn’t simply whether GMH now is paying gross payroll, but whether GMH recently has paid only net payroll. I would like to know whether any time in recent past (let’s call it for calendar year 2023)… GMH has issued payroll without paying required benefits and entitlements (taxes, retirement, insurance, etc.).”

No answer.

The following day, April 25, Kandit again followed up: “Hi Cindy, does GMH have a response to my question?”

Kandit, realizing GMH was hiding the information, emailed a Freedom of Information Act request that day for all documents containing information and discussion about net payroll payments going back to December.

Then, Ms. Hanson replied to Kandit’s follow-up email of April 25 the following day: “I was out of the office yesterday and did not have access to email. As you have submitted a formal FOIA request that appears to include requests for information pertaining to your email below, could you kindly advise if you still require a response to the email or is the request for info covered in your FOIA?”

In reply the same day, April 26, Kandit wrote: “Thank you so much, Cindy. I humbly ask for an answer as well as the documents. God bless you, my friend. Please have a wonderful day.”

There has been no response since.

No one else, to whom Kandit sent these inquiries, responded to them but Ms. Hanson. Neither GMH’s administrator, legal counsel, nor Adelup’s spokeswoman ever answered any of the questions.

Mr. Luther, the legal counsel, did respond today to Kandit’s FOIA for the net payroll documents, exercising the 10-day extension to disclose the documents and telling Kandit the documents will be ready by May 11.

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